The U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020 is a $2 trillion relief package that provides financial support for individuals, small businesses, states, and other entities impacted by the COVID-19 pandemic.
The CARES Act follows passage of two other pieces of COVID-19 legislation: the Coronavirus Preparedness and Response Supplemental Appropriations Act, which provides $8.3 billion to treat and fight the spread of COVID-19, and the Families First Coronavirus Response Act, which provides support for individuals and families through the form of food and nutrition assistance, emergency leave for workers, coverage for COVID-19 diagnostic testing, and funds for states to support unemployment benefits. Read summaries for nonprofits from Independent Sector and the National Council of Nonprofits.
Together with our sister museum associations, ASTC continues to advocate for dedicated relief to the nonprofit museum field in additional expected relief bills. Although there is no specific pending legislation at this time, it is still useful for you to reach out to your Members of Congress to communicate the impact that the coronavirus pandemic has had on your institution, as well as how you continue to serve your community. To learn more, see ASTC’s COVID-19 Advocacy Toolkit. Please also share stories about how you and your institution are responding to COVID-19 by sending a message to info@astc.org.
Below, we’ve summarized some pieces of the CARES Act that are most relevant for science centers and museums. There is still uncertainty about how the various provisions of the CARES Act will be implemented. Federal agencies, states, and local governments are actively setting up grant programs, online loan applications, and other guidance and infrastructure. If you have insight about implementation at the state or local level, or spot useful resources that would benefit the broader science center and museum community, please let us know at info@astc.org.
U.S. Small Business Administration Loan Programs for which Nonprofits are Eligible
The CARES Act establishes two loan programs administered by the U.S. Small Business Administration for which 501(c)(3) nonprofit organizations with up to 500 employees (or museums with annual revenue of $30 million or less) are eligible: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Although an institution may apply to both programs, you cannot duplicate the use of funds. ASTC is curating a set of resources to help science centers and museums better understand these loans and other available resources and relief. ASTC and SBA encourage you to reach out to their local SBA assistance center for guidance on these and other SBA disaster assistance programs.
The Paycheck Protection Program (PPP) offers loans designed to provide a direct incentive for small businesses to keep their workers on the payroll. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, SBA anticipates that at least 75% of the forgiven amount must have been used for payroll). Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. PPP is administered by the Small Business Administration (SBA), but loans will be processed by local financial institutions starting April 3. Application instructions are now live on SBA’s website. You must apply by June 30.
The Economic Injury Disaster Loan (EIDL) program offers low interest loans of up to $2 million (with a 2.75% interest rate for nonprofits). A $10,000 advance is available within three days, which does not need to be repaid. The loan may be used to cover sick leave, payroll, and increased costs due to mortgage or debt service, but cannot be used for the same purpose as the Paycheck Protection Program. You can apply now for the $10,000 advance through SBA.
Charitable Giving
The CARES Act includes a provision that allows a partial “above the line” deduction for charitable contributions, which means that individuals will be able to deduct charitable cash contributions up to $300 on their 2020 return even if they do not itemize deductions on their federal taxes. For those who do itemize, there is also a temporary suspension of the limitations on charitable contributions. During 2020, individuals will no longer be limited to 60 percent of adjusted gross income as a deduction. For corporations, the current 10 percent limitation will be increased to 25 percent of taxable income.
COVID-19 Appropriations for Federal Agencies
The Institute of Museum and Library Services (IMLS) will receive an additional $50 million in emergency appropriations to “prevent, prepare for, and respond to coronavirus, including by expanding digital network access, purchasing Internet accessible devices, and providing technical support services to their communities.” For these new grants, the requirement for matching funds is waived.
The National Endowment for the Arts (NEA) and National Endowment for the Humanities (NEH) will each receive $75 million for grants to support arts organizations, museums, libraries, and other organizations “to prevent, prepare for, and respond to coronavirus, domestically or internationally.”
These three Federal agencies are working on the details and timing of their grant applications. For more information, read the press releases from IMLS, NEA, and NEH.
Museums may be able to receive some support through the Department of Education if they are carrying out or supporting essential educational services. Read a deeper dive into education funding in the CARES Act from New America.